Harvard’s study of
high-cost Medicare patients offers insights into how medical laboratories can
help improve early diagnosis, optimize therapies, and monitor chronic disease

Clinical laboratories and anatomic pathology groups supporting Medicare patients understand that a small portion of high-cost patients make up the majority of Medicare spending. Between extended treatment, comorbidities, and the complex nature of disease therapies, chronic illnesses have a major impact on healthcare costs—both in terms of spending and labor reductions.

Thus, a recent Harvard Medical School study published in Health Affairs which attempts to identify the contributing causes of spending on high-cost Medicare patients will be of interest to medical lab managers and stakeholders who can develop innovative diagnostic testing services that help physicians diagnose these diseases earlier and more accurately. They then could guide physicians to select the most appropriate therapies and help physicians monitor disease conditions.

High-Cost Patients
Eligible for Both Medicare and Medicaid

According to Jose Figueroa, MD, co-author of the Harvard study, “28.1% of patients who were high cost in 2012 remained persistently high cost over the subsequent two years. On average, persistently high-cost patients were younger, more likely to be members of racial/ethnic minority groups, eligible for Medicare based on having end-stage renal disease, and dually eligible for Medicaid, compared to transiently and never high-cost patients.”

Studying a 20% sample of Medicare fee-for-service
beneficiaries in a period from 2012 to 2014, Figueroa and researchers from the Harvard T. H. Chan School of Public Health
and Harvard Medical School identified nine chronic conditions most prevalent in
patients identified as persistently high cost.

Out of a sample of 5,507,218 patients, the top conditions
found to contribute to persistent high costs included:

Might these findings represent an opportunity to medical
laboratories, anatomic
pathologists, and other members of the diagnostics industry? As early
detection is key to minimizing the cost of treatment and care, the ability to accurately
and rapidly detect these chronic diseases would be a major boon to clinical labs
and the physicians and healthcare facilities they support. Laboratories also could
find opportunities guiding therapy decisions and monitoring the progress of
treatments.

While improved testing for these chronic conditions could
reduce costs and improve quality of care, they also represent significant
revenue opportunities with one of the largest payers in the nation.

Impact of Chronic Disease
on Medicare’s Battle to Reduce Cost

“Medicare patients in the top 10% of spending each year
accounted for almost 20% of Medicare’s overall spending during the three-year
period covered by the study,” notes Fierce Healthcare.

“We found that 28.1% of Medicare beneficiaries who were high cost in a designated index year remained persistently high cost for all three years,” states Jose Figueroa, MD (above), Instructor of Medicine at Harvard Medical School and co-author of the Harvard study. “Despite being slightly less than 3% of the Medicare population, these persistently high-cost patients accounted for nearly 20% of total Medicare spending across the three–year period we studied.” (Photo copyright: Brazosport Independent School District.)

Across the period, mean yearly spending for never-high-cost
patients was only $5,206 per person. The mean yearly spending per person for persistently
high-cost patients averaged $69,793—an increase of more than 1,240%!

Figueroa told Fierce
Healthcare he believes policy changes are key to reducing costs for
patients with chronic health conditions. He cites inadequate housing, reduced
access to healthy foods, reduced mobility, and ease of transportation to and
from care providers as potential reasons for the racial and ethnic disparities
highlighted in his findings.

The Harvard study notes that few of the expenses incurred by
persistently high-cost patients are preventable through alternate treatment. For
most, outpatient care and drug spending make up a large part of those expenses.
And, as the study points out, younger patients with chronic diseases stay persistently
high cost for longer periods.

Clinical laboratories that help develop and implement
diagnostics aimed at early detection could help reduce long-term spending as
well—particularly in relation to patients with multiple chronic conditions.

There also were presentations on how clinical laboratories
can help physicians and health plans identify undiagnosed patients. For
physicians, this means more revenue as risk adjustment payments are increased
for these newly-diagnosed patients. For health insurers, the ability of labs to
identify undiagnosed patients means that the insurers can close care gaps and
improve the patient outcomes produced by their health plans.

As drug costs are a major source of Medicare expenses in persistently
high-cost patients, helping physicians target therapies with innovative
diagnostics could further lower costs by ensuring the ideal medication is used
alongside inpatient or outpatient services.